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Foreclosure FAQ's

Acting immediately is crucial to making the best out of a foreclosure. If you don’t know what to do, call us right away at 403-836-7411, so we can help give you the best options.

 

Even if you haven’t missed a payment but you think you might, it is not too soon to let us help you.

 

The following are answers to some of the common questions about foreclosure and foreclosure prevention.

  • Can you stop foreclosure once it has started?
    Yes, it is possible to stop a foreclosure once it has started; however, it is not guaranteed. The frustrating truth is that every case is unique and being able to stop the foreclosure depends on many factors. The best way to find out if your foreclosure can be stopped is to call us at 403-836-7411 and let our team asses your situation.
  • How can I stop my foreclosure?
    Stopping foreclosure may be as simple as making up any missed mortgage payments and late fees. However, depending on how far the process has gone, it may require more drastic measures such as complete refinancing. Contacting foreclosure specialists as early in the foreclosure process as possible will help you reduce overall expenses and allow us to offer more solutions to stop your foreclosure.
  • How many mortgage payments can I miss before my lender can foreclosure?
    A bank or other lender can start the foreclosure process with only one missed payment. However, since most lenders make their money when you make your payments, they are often willing to give you a grace period before starting the foreclosure process. Sometimes all it takes is speaking with your lender and arranging a new payment schedule to stop or prevent a foreclosure. If you anticipate financial difficulties, we may be able to help you negotiate new terms with your lender to help ease your financial burden.
  • What happens if I default on a mortgage in Canada?
    After you have missed one or more of your mortgage payments your bank will send you a letter indicating that you have defaulted on your loan, outlining the deadline and terms that you must satisfy to return your mortgage to good standing. At this point it usually just requires paying the outstanding payments and any associated fees to stop your foreclosure. If you are unable to meet the deadline, then the bank will start legal proceedings. Once you receive the first letter there are usually many avenues available to stop your foreclosure and it is crucial to call us right away so we can help you navigate the situation.
  • What does foreclosure look like in Canada?
    The process of foreclosing on a property begins with a letter to the borrower indicating missed payments and the deadline and terms to prevent further legal action. If the borrower does not meet the deadline, the lender will request a court hearing to express their desire to be paid the missed payments or the full amount of the mortgage. After the initial hearing, the borrower will have a new deadline to meet the new payments terms that were outlined in court. If the borrower does not meet the new deadline, the lender can seek to obtain the title of the property and force the sale to recoup the balance of the loan and any associated costs. Throughout this process a lender typically only wants their money and are willing to work with the borrower to recoup the missed payments and fees. However, if the borrower is unable to satisfy the payments terms, there may still be options to make the best of the situation; however, borrowers will have fewer options available the further along the foreclosure has gone. Calling us right away is critical to give you the most and best options to mitigate the circumstances of your foreclosure.
  • When is it too late to stop foreclosure?
    The frustrating answer is it depends. This varies by lender and many other factors such as your financial history and the value of the property. Once it reaches the court your only option may be to pay the entire balance due. Early intervention in your case by foreclosure specialists is the best way to find a solution to stop your foreclosure.
  • How long does a foreclosure take in Canada?
    The frustrating answer is it depends. This varies by lender and many other factors such as your financial history and the value of the property. Once it reaches the court your only option may be to pay the entire balance due. Early intervention in your case by foreclosure specialists is the best way to find a solution to stop your foreclosure.
  • When can the bank foreclose on my house?
    Most lenders will send a default letter after two missed payments, which starts the foreclosure process.
  • How can the bank take my house?
    When the court approves the seizure of your house you will receive a notice of the date by which you must remove all your possessions and leave the house. Law enforcement will likely be called to enforce the eviction if you do not move out by the indicated date.
  • Do I still owe the bank if they foreclosed on my house?
    This depends on the course of action the bank takes and other factors such as your equity in the house and the current value of your property. If the bank is able to recoup the outstanding balance and fees, then you likely won’t owe the bank any more money. However, if the bank cannot recover the balance due and their fees through the sale of the property then you can still end up owing the bank money. If your mortgage was insured with a CMHC, Genworth or Canada Guaranty and they cover the shortfall, then you may be sued by the insurer.
  • Will foreclosure affect my other properties?
    Foreclosure affects any property used to secure the loan that went into default. So long as your other properties are not connected to the defaulted loan they will not be affected. However, a foreclosure may cause a lender to not renew other loans with you in the future due to the foreclosure.
  • How does foreclosure affect my taxes?
    Foreclosure does not affect income taxes if the property is your primary residence. Tax implications may arise if the property was a rental, or it is held by a corporation. It is wise to speak with your accountant to understand the tax and financial implications of your specific situation.
  • What are the consequences of a foreclosure?
    The immediate consequence of foreclosure is that you will lose your home or property. Furthermore, foreclosure significantly impacts your credit, making it difficult to secure another mortgage in the future. If you are able to secure another mortgage, the financing rates and insurance will likely be much more expensive.
  • How long does a foreclosure affect your credit?
    A foreclosure will remain on your credit report for seven years from the date of your first missed payment.
  • How soon can I buy a house after foreclosure?
    A foreclosure doesn’t affect your ability to buy a house, it affects your ability to get any financing. If you have the cash, you can buy a house or property right away; however, if you need financing, it is usually more expensive. Until the foreclosure comes off your credit report, you will likely need to rely on a private lender who may require a larger down payment and their rates are typically higher than the bank rates.
  • What does power of sale mean?
    Power of sale is a clause in your mortgage contract that lets the lender sell the property if you default on the loan.
  • Can you get your house back after foreclosure?
    Since lenders generally want their money and not your house, you can usually get your house by paying the balance due and any associated fees. If the courts approve the sale of your house, it will generally be sold on the open market, and you would have to compete with all other potential buyers of your property.
  • Can bank go after other assets in foreclosure?
    No, the bank cannot seize other assets that are not associated with the loan. However, if there is a shortfall between the balance due and the sale price of the property, the bank may choose to sue the borrower and personal guarantors to make up for the shortfall.
  • Can a bank foreclose without notice?
    In Canada, you will not wake up to find that your house has suddenly been foreclosed and you are facing potential eviction. Any bank or lender must provide first a notice of default before starting the more formal foreclosure process through the courts.

If you don’t know what to do next, call 403-836-7411 for your no cost, no obligation consultation.

We can answer and other questions you have about your foreclosure and show you your options.

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